CONSIDERATIONS ON THE MANAGEMENT OF STATE COMPANIES BY CORPORATE GOVERNANCE

Moldovan Iosif
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Moldovan Iosif: Lucian Blaga University of Sibiu, Romania

Studies in Business and Economics, 2013, vol. 8, issue 1, 79-85

Abstract: Over 20 years of market economy in Romania showed that the State is unable to manage companies in which it is a stockholder (wholly or majority). This situation is proven by the large amount of arrears in the general consolidated budget as well as the acceptance of significant annual losses for those companies. The main reason is the poor quality of management practices resulting from the appointment of top managers and members of the boards of directors for these companies, not by a rigorous professional selection, but as sinecure granted by policymakers. This approach has been noticed by the Romanian opinion leaders as well as the IMF experts who perceived the damaging consequences of this attitude and conditioned the further assistance granted to Romania putting an end on this situation. The solution is to outsource the management for state companies so they can be managed by corporate governance rules the way private companies are.

Keywords: inefficiency of public management; corporate governance; public company; arrears (search for similar items in EconPapers)
Date: 2013
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